EMERGING MARKETS-Latam FX firms, stocks rise ahead of packed week of inflation readings

By Pranav Kashyap

Feb 9 (Reuters) - Most Latin American currencies kicked off the week on a firmer note, while regional stocks edged higher as investors looked ahead to a packed week of economic data that could reshape expectations for rates.

The Mexican peso MXN= gained about 0.4% against the U.S. dollar after data showed inflation sped up in January. It helped validate the Bank of Mexico's decision last week to hit pause on its rate-cutting cycle, and it could give the peso some extra tailwind after lagging broader emerging-market currency gains last year.

Mexican stocks .MXX edged up 0.3%. Mexico's central bank spent much of last year trying to coax the economy's growth back and a stickier inflation backdrop strengthens the case for caution on easing.

"While we don't think this will prompt Banxico to end its easing cycle... it's clear that the easing cycle is in its final stage," said Kimberley Sperrfechter, emerging markets economist at Capital Economics.

Across the region, a benchmark index for Latin American equities .MILA00000PUS rose 1.2% on the day, while a similar currency index .MILA00000CUS climbed 0.77%.

The U.S. dollar struggled to find its footing as markets braced for a heavy slate of U.S. releases this week, including jobs data, inflation, and consumer spending figures, that can ripple into EM FX.

Mexico's inflation print effectively opened the week's data deluge, with January inflation figures from Brazil and Argentina due Tuesday. Those readings will be closely watched not just for what they say about price pressures, but for how they shape inflation expectations this year, and the region's carry appeal, a key ingredient behind Latin America's market outperformance last year.

Brazil's real BRL= rose 0.6%. Traders continued to expect the start of a rate-cutting cycle as soon as March. For that view to hold, Tuesday's inflation report likely needs to show January price growth staying moderate and below the upper limit of the central bank's target range for a third straight month.

The numbers may draw extra scrutiny after the central bank chief emphasized calibration and a data-dependent approach -language that signals policymakers want to move carefully, even as they've indicated easing could begin in March.

The benchmark index .BVSP was 0.6% higher. Separately, the country announced its first dollar bond sale in 2026.

In Argentina, the peso ARS= and equities were steady ahead of Tuesday's inflation release.

U.S. Energy Secretary Chris Wright planned to visit Venezuela soon to "start the dialogue" with officials on the future leadership of Venezuelan oil company PDVSA, Politico reported. Stock in Caracas .IBC rose 2%.

Latin American markets, overall, ended last week with modest gains, even after a turbulent stretch marked by sharp volatility, big swings in precious metals, and a tech-led selloff that rattled global equities.

Peruvian equities .MXNUAMPESCPGPE jumped 2.2% ahead of its interest rate decision on Thursday.

Key Latin American stock indexes and currencies: